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Behavioral health services at risk during Medicaid probe

Audits stonewall providers on the up and up

By Bryant Furlow

New Mexico In Depth

Posted:
06/30/2013 10:15:43 PM MDT

The suspension of Medicaid payments to 15 behavioral health providers during an investigation of overbilling and other issues could disrupt services -- including drug abuse and suicide counseling -- for thousands of patients across New Mexico.

"I'm very, very concerned," said Patsy Romero, chief operating officer for Santa Fe-based Easter Seals El Mirador, one of the providers under investigation by the state Attorney General's Office following state-ordered audits. "The potential disruption of care is incredible."

The state also is worried.

"We are concerned about possible disruptions but hope those will be limited in nature," Human Services Department spokesman Matt Kennicott said.

Federal regulations require that the state suspend all Medicaid payments to the providers targeted by recent compliance audits while the Attorney General's Office investigates, according to state officials. Problems the audits identified at the 15 agencies include overbilling, failing to meet documentation and safety standards, and potential fraud.

New Mexico In Depth has requested a copy of the audit report. Kennicott provided a summary of the audit findings, but the full audit has not been released.

Each of the 15 providers "failed to meet compliance standards" and collectively overbilled the Medicaid program $36 million between 2009 and 2012, according to HSD's summary of the audit, which was performed by a Boston-based contractor, Public Consulting Group.

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HSD officials say they are working to finalize contracts with five Arizona behavioral health providers to help the 15 New Mexico agencies during the attorney general's investigation, which could take months. No details about how that assistance would work have been given to the audited providers, Romero and others said.

"The state doesn't own our buildings or nonprofit companies," Romero noted.

Suspending payments might affect more than behavioral health services by threatening the stability of agencies whose work extends beyond such services. Easter Seals, for example, also provides housing and care for developmentally disabled adults.

"We have 89 clients" with developmental disabilities, Romero said. "Who is going to care for them? We provide their homes."

Long inquiry possible

An investigation lasting nine months or longer is "certainly plausible," said Phillip Sisneros, spokesman for the attorney general. But "it is very difficult to put a timeline on the investigation since it will involve extremely large amounts of documentation and witness interviews," he said.

Sisneros said the probe would "put a very serious strain on our resources" and that state Attorney General Gary King is looking for ways "to secure needed additional resources to handle this case."

While Kennicott said the state has ordered the agencies under investigation to continue providing services to patients despite not being paid -- as their Medicaid contracts require -- Romero isn't sure that's possible.

Easter Seals El Mirador does not have the cash to continue operations without Medicaid payments during a prolonged investigation, she said.

Drug and alcohol dependence services and psychological and suicide prevention counseling are among the services offered by the audited providers, which include several of the state's largest.

New Mexico has some of the highest rates of drug overdose and suicide death rates in the nation. The affected providers include those providing services to Native Americans and children in foster care.

Steve Hansen, CEO of Presbyterian Medical Services, said his agency will "have to tighten our belt and hunker down to make sure we can survive it." He called the decision to suspend payments "a total surprise."

"The scary part is there's no indication of response time and no information from HSD on where the (billing) errors were," Hansen said.

HSD gave providers the summary of the audit's findings Monday, but no copies of the audit report and no details about individual providers' alleged wrongdoing, Hansen said.

Easter Seals and PMS are appealing the state's suspension of Medicaid payments.

Serious allegations

Some allegations in the audit findings are very serious. Safety and risk assessments weren't done for some patients who were determined to have "current or past suicidal tendencies, homicidal tendencies, self-harm issues, or domestic violence issues," the audit summary states.

In one case, a patient committed suicide after six visits to an agency that failed to conduct safety assessments, despite the patient's expression of suicidal feelings, HSD's summary states.

In 2010, The New Mexico Independent reported that Medicaid fraud investigators at the Attorney General's Office complained to the federal government that HSD had "stonewalled" investigations, refusing to turn over billing data after repeated requests.

The new audits were ordered after fraud-detection software raised red flags in "early 2012," HSD officials said. HSD and OptumHealth, which oversees the providers, had not alerted providers to any concerns or provided them with opportunities to submit corrective action plans, Romero and others said.

Romero said audits and increased accountability were "long overdue" for the state's behavioral health system. But she added that she's "disappointed" in HSD's handling of the situation.